Three warns over UK mobile spectrum share

Mobile phone operator Three has warned that it may run out of capacity in urban areas by the end of next year if the UK's 4G spectrum auction fails to go ahead as planned.

Networks are facing ever increasing consumer demand for mobile data as smartphones, tablet computers and other devices become more widespread.

Media regulator Ofcom announced plans in March to put up for sale what is equivalent to three-quarters of the mobile spectrum in use today, around 80% more than was sold off in the multi-billion pound 3G auction that took place in 2000.

However, Three has no spare spectrum to reallocate and so will run out of capacity for carrying data traffic before its rivals unless the auction goes ahead sooner rather than later.

The firm said that it is vital that it got its fair share of new spectrum and also warned that its rivals are intent on delaying the auction process.

At a press briefing in London, Three chief executive David Dyson said: "There is a huge financial incentive for rival operators to delay the auction. We are worried that the other three will attempt to squeeze us out of the market."

Three has consistently expressed fears about being frozen out by the big three operators. Ofcom responded to this by including in the auction rules a cap on the amount of 4G spectrum companies can win to keep the playing field level.

"[Ofcom] has made it clear that it wants Three in the market and that it values Three's disruptive influence," said Howett.

Howett is concerned that the timetable for the auction process was already slipping, but remains confident that it will go ahead as planned, particularly as the government views mobile broadband as key asset in the drive to connect rural areas of Britain to the web.

"Ofcom originally planned to come back to the industry with its plans in September or October but that is now likely to be the end of the year or the beginning of the next," Howett said.

He added: "It is a hugely ambitious timetable, trying to do in 18 months what took three years for 3G, but most are optimistic it can still be met."

As part of its efforts to make data more widely available, Three has announced plans to drop the price of its popular 'all-you-can-eat data' plan to £18 a month.